Billions. That’s the amount of dollars spent a year by brands on elaborate efforts to establish and maintain a social media presence. According to the Harvard Business Review, Facebook is the preferred platform -80% of Fortune 500 companies have active Facebook pages.
And every day, large amounts of brand-generated content—articles, photos, videos, etc.—appear on those pages and on other social media platforms.
The content is designed to convince people to follow, engage with, and buy from brands. Even the U.S. State Department seems enamored of acquiring followers, having spent $630,000 from 2011 to 2013 to garner Facebook likes.
Marketers often justify these investments by arguing that attracting social media followers and increasing their exposure to a brand will ultimately increase sales. According to this logic, recruits who socially endorse a brand by, for example, liking it on Facebook will spend more money than they otherwise would, and their endorsements will cause their friends (and friends of friends) to shop—creating a cascade of new business. At first glance the evidence seems to support this rationale: Many brands have discovered that customers who interact with them on social media do spend more money than other customers. A recent influential study by comScore and Facebook found that compared with the general population, people who liked Starbucks’s Facebook page or who had a Facebook friend who liked the page spent 8% more and transacted 11% more frequently over the course of a month.
Merely liking a brand on Facebook doesn’t change behavior or increase purchasing.
But that study and others like it contain a fatal logical flaw: They confuse cause and consequence. It’s possible that getting people to follow a brand on social media makes them buy more. But it’s also possible that those who already have positive feelings toward a brand are more likely to follow it in the first place, and that’s why they spend more than non-followers.
In many HRR experiments, the results were clear: Social media doesn’t work the way many marketers think it does. The mere act of ‘liking’ a brand does not affect a customer’s behavior or lead to increased purchasing. Supporting endorsements with branded content, however, can have significant results.
Testing the Effects of Likes
Basic psychological principles give reason to suspect that liking a Facebook page could indeed change behavior and increase sales. Research has shown that people experience “cognitive dissonance” when their actions don’t reflect their beliefs, so it would stand to reason that a social media user who endorses a brand on Facebook would be more likely to buy it. Yet that’s not what the research found across 16 studies -no evidence that following a brand on social media changes people’s purchasing behavior.
Measuring the Return on Facebook Likes
There is a way to convert likes into meaningful behavior: advertising.
Unlocking the Power of Likes
The good news is that there is a way to convert likes into meaningful behavior, and it’s straight out of the 20th-century marketing playbook: advertising. Each year Facebook collects more than $22 billion in ad revenue. Most of that comes from brands seeking to circumvent the platform’s algorithms by paying to guarantee that their content will be prominently displayed to large numbers of users.
What does all this mean for marketers? As social media’s popularity has increased over the past 10 years, many predicted a revolution in marketing strategy.
It wasn’t uncommon to hear about the end of “push marketing” (in which brands promote and advertise their goods and services) and the rise of “pull marketing” (efforts to draw customers in through social media and other channels). “More judo, less karate” became a popular aphorism. But our research suggests that marketing on social media will be ineffective if it uses only pull tactics.
The modern social media marketing playbook should combine new and traditional approaches.
Make likes work for you
Facebook does not currently give companies the option of paying it to highlight the posts of engaged customers, something HRR research suggests could provide significant value by influencing behavior. Savvy firms could overcome this obstacle by monitoring their social media channels for eloquent endorsements and integrating those endorsements into their marketing messages.
The athletic apparel brand Lululemon collects favorable customer-generated content by tracking hashtags (such as #thesweatlife) and retweets it. The fashion retailer Free People adds customers’ Instagram photos to its product pages. And in a holiday promotion, Lamar Advertising’s billboards displayed photos that people had tagged with #ThankfulThisHoliday. More brands could also adopt the increasingly common practice of “seeding” social endorsements by paying influencers to try the brand and send endorsements to their followers.
Make endorsements meaningful
Another reason why liking a brand does not influence online friends is that liking is a very weak endorsement; our research shows that it doesn’t carry the same weight as a real-world recommendation. Yet research by MIT’s Sinan Aral and colleagues has shown that endorsements, and referrals more generally, can spur action. One experiment demonstrated that people were more likely to download and use an app if a friend recommended it than if they were merely told that their friend had downloaded it. Other experiments indicate that “deeper” social media endorsements could close the effectiveness gap between real-world and digital recommendations. For example, Facebook posts indicating that a Facebook friend is using a product—not just that he or she likes it—increase the chances that a member will use the product too. The effect is pronounced when product users send their friends personal messages of recommendation.
Use “pull” marketing to find your best customers, and listen to them.
One reason Facebook advertising can be effective is that a brand’s social media page reaches a highly desirable audience; likes illuminate a path for targeting ads. Yet even if a brand decides not to spend money advertising, it can use its social media channels to gain intelligence from its most loyal customers. This need not entail recruiting new followers through flashy content; in fact, such tactics might backfire by attracting people who are not strongly attached to the brand. Companies pursuing this option should favor organic growth, letting customers seek out the brand. Almost by definition, the people who go to the trouble of finding a brand on social media will be its most devoted, and thus most valuable, customers. As a group, these customers are a great asset: They will enthusiastically provide feedback to improve product development, management, and delivery; defend the brand against unjustified complaints; and be early adopters of and evangelists for new offerings.
For example, Lego uses its social media channels to gather customers’ ideas for new products and to tout new product lines. Knowing that their voices will be heard can make customers more willing to offer information and might even cause them to be more civil when they (inevitably) have complaints.
As social media has grown as a marketing channel, so too has enthusiasm for its potential to drive sales. In a recent study, 427 marketers at U.S. companies showed that 80% are unable to quantify the value of their social media efforts. And in a study of Fortune 500 companies, 87% of CMOs acknowledged that they can’t document that social media creates new customers.
This research helps explain why marketers are frustrated by social media—they are using it the wrong way.
Amplifying your efforts with advertising can provide higher returns on investment while creating an opportunity to connect with the most-loyal customers.
Want to learn how to effectively implement Social Media Strategies for Your Small Biz? Join me at my next workshop HERE!
Data info credit: March–April 2017 issue (pp.108–115) of Harvard Business Review.